Feeling tempted to quit your job and start working as a freelancer? You’re not alone.
Far from being a fringe sector, freelancers generated $1 trillion for the US economy in 2019 (according to Upwork)—that’s a massive 5% of the country’s GDP. This increased by 22% to $1.2 trillion in 2020, as more of us made the shift to self-employment during the coronavirus pandemic, showing that the rise of the freelancer shows no signs of slowing.
But full-time freelancing isn’t for everyone. Here are 5 important questions to ask yourself before you start:
1. Can you afford a slow start?
Before you can land your first paying client, you’ll need to spend time on tasks like:
- Setting up your website
- Promoting your services
- Networking online
- Searching freelance job sites
- Pitching new clients
This is time you’re not being paid for. So how will you cover your living expenses while you build up your business?
Savings. Enough to sustain you for around 3 months (or more), while you look for work.
This might sound like a lot but without a financial buffer, you’re more likely to be tempted by low-paying gigs that demand lots of work for little money—increasing your risk of burnout before you’ve had a chance to build your business.
No savings? Consider starting your freelance business as a side hustle alongside another job. That way, you’ll be able to learn the ropes, build your client list, and make business decisions without being influenced by financial pressure.
2. Have you done the long-term math to freelance?
When you go freelance, you will be responsible for all of your costs—including things like equipment, taxes, healthcare, business insurance, vacation days, and sick pay that would usually be covered by an employer. So you’ll need to make sure you can:
- Cover all your essential costs, and
- Reach your own financial goals.
I recommend calculating your costs first then working backward to get to your “ideal” rate. Taking into account how much disposable income you’d like to have, how many hours you want to work, and the going-rate in your industry. For more on setting your rates, read my previous post on how to make sure you’re charging enough for freelance work.
Check out our post How to Cut Your Business Costs for a list of common business outgoings to consider.
3. Are you a people person?
No boss, no office politics, no awkward morning commute. Freelancing sounds like an introvert’s dream, right? Well, not quite.
If you’re considering freelancing full-time because you hate having a boss, don’t like dealing with people, or hate confrontation, here are some freelance-truths to keep in mind:
- Freelancers don’t have “no boss,” they have several—you’ll be reporting to every client, customer, subcontractor, and supplier you work with or who books you for a job.
- You have to build relationships if you want to succeed. While there are lots of ways to get freelance work, building a network is by far the most successful route I’ve found. You can do this by connecting with fellow freelancers and potential clients at in-personal networking events (check sites like MeetUp for events in your area), “virtually” on LinkedIn, or with these other networking options. In my freelance career, referrals from other freelancers and word-of-mouth recommendations have been my best source of regular work.
- Freelancers have to manage projects from start to finish. This means putting yourself out there and talking to new people, pitching new clients, being able to sell your services and negotiating your freelance rates, managing projects and people, and resolving conflict when things don’t go to plan. If you want to focus all your time on the work you love and none of this other stuff, then freelancing might not be for you.
If this sounds like your idea of a nightmare, it doesn’t mean you shouldn’t freelance! But you might be better testing the waters with a freelance side-hustle first, or partnering with people who do the tasks you don’t like doing.
Tip: You don’t have to do everything yourself. In the beginning, there are lots of online tools for freelancers you can use to automate routine tasks. Once you build up an income, you might want to outsource tasks that aren’t your strong suit (like posting on social media or doing your taxes) to a virtual assistant or another professional, so you can focus on what you do best.
4. Do you have the right experience to freelance?
When you’re an independent contractor, the buck stops with you. So when a client commissions you for a project, you should be able to deliver the goods.
Every freelancer experiences imposter syndrome (feeling like you don’t have the skills or qualifications to do your job) at some point, especially when starting out. So here are some tips on how to evaluate your skills objectively.
- Read job descriptions for similar roles. You might consider yourself equal to an entry-level graphic designer or middle-weight copywriter. Search for these roles on traditional job sites and check out what kind of skills, qualifications, and responsibilities are required at that level. It’s not perfect, but it’s a good way to get a rough idea of where you might fit in the market.
- Look at other freelancer websites and portfolios. Search for other freelancers in your area or industry (you might already be connected on LinkedIn) and check out their portfolio websites, resume websites, and pricing pages. Try not to compare yourself too harshly to others. Everyone has something different to offer! But if the majority of projects look completely out of your league, then it’s probably worth building up your skills and your confidence in employment first.
If you decide to stay in your 9-5 a while longer, don’t give up! Try these tips, then re-evaluate in six months’ time. Say “yes” to any workplace training, read up on the current trends in your industry, or enroll in an online course.
5. Can you separate freelancing from your personal life?
As a freelancer, it’s important that you can draw a clear line between business and your personal feelings. This can be tricky, because clients take a chance on you (not a faceless brand) and you, in turn, put a certain amount of trust in them. When someone breaks that trust, it’s hard not to take it personally.
For example, when you’re an employee, it’s easy to pass the blame with phrases like, “Sorry, it’s the boss’s orders!” or “I would if I could, but it’s out of my hands.” As a freelancer, you have to be prepared to stand up for yourself and your business. This might mean picking up the phone to ask your favorite client why their invoice is two weeks overdue, telling your oldest client that you are raising your rates, or dealing with negative feedback about your work.
A robust freelancer contract will go a way to protecting you and your clients. But there will be still times when you have to be tough about those contract terms—without losing sleep over it.
Are you ready to make freelancing your career?
We all have our reasons for going freelance. It could be the flexible work hours, more family time, a wider choice of opportunities, or the power to set your own rates.
Freelancing is more than a job—you’ll essentially be running a small business. By being realistic about how much time you have and what you want to achieve, you’ll set yourself up for a really rewarding freelance career.